3 Tips to Earning Credit Card Rewards Responsibly

A couple weeks ago, I shared how my wife and I were able to score an almost free trip to Disneyland for our family of four using credit card rewards. The trip required that we earn sign-up bonuses from five different credit cards. So naturally, a few people reached out to me to ask how I manage to do it without getting overwhelmed. Here are the main three tools I use.

1. Keep a budget

Our budget is by far the most important tool in this hobby of mine. When you’re trying to earn a sign-up bonus, it’s tempting to start buying stuff you don’t need to get there. Having a budget keeps your spending in check. After all, getting a sign-up bonus worth $500 isn’t really worth it if you ended up spending that much on stuff you don’t need to get it.

We use You Need a Budget (YNAB) to create our monthly budget and to track our expenses. It costs $50/year and lets me keep track of all my bank accounts, credit cards, loans and investment accounts. It updates my transactions daily so I know where the expenses are coming from, and I can also see how my net worth has changed over time.

I love YNAB. I started using it years ago when it was free and didn’t hesitate for long to upgrade to the paid version. That said, I understand some people won’t want to fork over the cash for it. Personal Capital (which I’ve never used) and Mint (which I’ve used and didn’t really like) are some free options to consider.

Whatever you choose, I’d highly recommend you use a software that imports your transactions automatically. The more cards you have, the more time it takes to log into all your accounts to update your transactions. Having direct import can also let you know pretty quickly if someone’s using your account fraudulently.

2. Track your credit cards

I’ve applied for more than 30 cards over the last couple years, and the more card I get approved for, the harder it is to keep track of them. If you have cards that charge an annual fee, you’ll definitely want to know when the first year is up so you can decide whether or not to cancel the card. It’s also nice, though not essential, to know the timeline on each card and how long it took for you to earn the sign-up bonus.

I’ve created a model spreadsheet that you can copy and use while building your credit card portfolio. I added a sample so you can see how it works. Personally, I usually cancel my cards before they hit that first year mark. Unless I plan to use the card going forward, I don’t care to pay an annual fee. This spreadsheet reminds me when I need to do that. It also helps keep me updated on when I’ve met certain bonus requirements.

One thing to note: Some credit cards award your bonus sooner than others. It may happen the day you reach the minimum spend requirement and it may happen a month later. Keep this in mind when planning your trips.

3. Track of your credit card rewards

Now that you’ve earned some rewards (hooray!), it’s easy to remember where they are. The more cards you earn rewards with, though, the harder it is to keep track of where you have points and miles.

To help me keep track, I use AwardWallet (that’s a referral link, by the way). It’s a website that aggregates your points and miles by using your login information with each loyalty program. It’s not perfect; some programs don’t allow the site access to their websites, so you have to do a manual approach. It also doesn’t automatically update. Rather, you have to click to update when you login.

But it’s better than nothing. They have a free version, but I pay for the premium version (currently $30/year). I think it’s worth it, but you can also just create your own spreadsheet to keep track.

The bottom line: Organization is key

This hobby isn’t going to work out for you if you don’t want to spend the time staying organized. Fortunately, these tools I’ve shared cut down the time it takes to keep track of your cards and helps keep this hobby a rewarding one. That said, there have been times where I’ve felt overwhelmed and needed to stop applying for new cards for a while. Everyone has a limit, so know yours. Again, letting things get out of hand can result in overspending and interest, both of which can negate all the rewards you’re earning.

About Ben Luthi

Ben started Latter-day Finance because he's passionate about helping people better manage their money. He has been writing about money since 2013 and learning about it since long before that. He currently writes full-time for Student Loan Hero and has a freelance writing business on the side.

Comments

So, is there a rewards card you would recommend for someone like me who isn’t going to play the rewards game? Like, I just don’t have the energy to apply for cards, get the rewards, and cancel quickly, I’m just looking for a solid card I can always use that gives decent long term rewards?

Good question! If you want travel rewards and are ok with a small annual fee, I’d recommend the Capital One Venture (big sign-up bonus and great rewards). If you want travel rewards but no annual fee, I’d go with the BankAmericard Travel Rewards (small sign-up bonus and decent rewards). If you want cash back, my pick is the Citi Double Cash (no sign-up bonus but great rewards).

Hello and welcome! I'm Ben and I run Latter-day Finance. I've been eating, sleeping, and breathing personal finance ever since I first picked up Dave Ramsey's Total Money Makeover in 2009. I believe that managing money well is essential to a fulfilling life. Learn more about me here.

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Latter-day Finance is not affiliated with or sponsored by the Church of Jesus Christ of Latter-day Saints. The opinions in this blog represent the opinion of the author and are not meant to represent the teachings or doctrines of the Church of Jesus Christ of Latter-day Saints. Nor are the opinions endorsed or recommended by the LDS Church.

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The posts on this blog are based on my opinions and personal experiences. Do your own research and consider consulting a financial advisor before making financial decisions. There may be paid advertisements on this website. You are under no obligation to purchase the products or services advertised on this website.